An important new role for the world’s first cryptocurrency as an inflation gauge — or just another fantasy of Bitcoin maximalists?
Throughout the middle of March, many Americans received stimulus checks from the government, and while the payments — $1,400 for every U.S. citizen earning less than $80,000 annually — will be a blessing for millions in desperate economic straits as a result of the COVID-19 crisis, it has raised again the specter of inflation. And as with many other things, this too has a Bitcoin (BTC) angle.On March 15, Galaxy Digital CEO Mike Novogratz proposed on NBC’s Squawk Box a new role for Bitcoin in light of recent stimulus measures — as “a report card for how citizens think the government is doing managing their finances.” If people believe that U.S. Treasury Secretary Janet Yellen et. al. can safely land this “giant supertanker” that is fiscal and monetary stimulus, said Novogratz, then “people will stop moving into Bitcoin.” But for now, “we’re in uncharted territories in how much money we’re printing, and Bitcoin is a report card on that.”Podcaster Preston Pysh urged something similar a few days earlier in response to the news that the U.S. House of Representatives had passed the $1.9-trillion COVID relief package: “Think of #Bitcoin like a manipulation gauge.”What is one to make of this? A new and exciting use case for the world’s first cryptocurrency — i.e., as a sort of a feedback tool for monetary policymakers? Or just another …
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